Ipartner Pte Shipping Ltd & Ors v Panacore Resources Dmcc & Ors

Civil contempt requires proof beyond reasonable doubt that the respondent knew of the order, breached it, and knew the facts making the conduct a breach. Knowledge that the conduct amounted to contempt is unnecessary. A company director may be liable where, knowing of the order, he wilfully fails to take reasonable steps to secure compliance. Mere inactivity is insufficient. Where compliance is impossible, there may be a breach but no contempt. An order requiring disclosure to the best of a company’s ability must be construed by reference to the specified deadline; any ambiguity is resolved in favour of the alleged contemnor. A director’s efforts and access to information are relevant to whether the company complied.

The claimants sought committal orders against company directors and permission to issue writs of sequestration for alleged breaches of worldwide freezing orders. They alleged that Panacore Resources DMCC and Panacore Shipping Pte Ltd had failed to provide adequate asset, historic transaction, ownership and control information, and that Resources had disposed of assets by funding another respondent’s legal expenses.

The court considered the responsibility of directors for corporate compliance, the meaning of disclosure obligations requiring compliance to the best of the company’s ability, the effect of impossibility, and the procedural requirements for committal applications.

1. Applicable principles. Non-compliance with an order endorsed with a penal notice may constitute civil contempt under CPR 81.4. The claimant must prove beyond reasonable doubt that the respondent knew the order, breached it, and knew the facts constituting the breach. It is unnecessary to prove knowledge that the conduct amounted to a breach.
2. A director who knows of an order against a company must take reasonable steps to secure compliance. Wilful failure to do so may constitute contempt. The concept is not confined to cases where the director reasonably believes that another officer is complying. Mere inactivity is insufficient, but failure to supervise, investigate or avoid wilful blindness may amount to culpable conduct.
3. Where compliance is impossible, an omission may breach an order but does not constitute contempt. Here, the disclosure order required compliance to the best of the companies’ ability by a specified deadline. It did not impose a continuing duty to search for information after that deadline. Any ambiguity in the order was resolved in favour of the alleged contemnor.
4. The contempt allegations against Shipping, Mr Anand and Mr Duggal failed. The evidence did not establish beyond reasonable doubt that Shipping had failed to make proper enquiries or provide disclosure to the best of its ability. The directors were dependent on others, made enquiries of the most relevant persons, and supplied the information obtained. Any limited deficiency concerning ownership was subsequently cured.
5. The allegations concerning the initial Teare J. Order against Resources and Mr Kashyap also failed. However, the complete absence of any attempt to comply with the later Rainey Order established contempt by Resources and Mr Kashyap. Mr Kashyap had wilfully failed to take reasonable steps to secure compliance.
6. The alleged disposal of Resources’ assets by payment of Group’s legal expenses was not proved. The evidence showed that the money was not ultimately used for that purpose, and a different allegation of dealing with assets could not be introduced at the hearing. The contempt applications against Shipping, Panacore Group, Mr Duggal, Mr Anand and Mr Bhatia were dismissed. Resources and Mr Kashyap were given 14 days to purge their contempt before sentence.

First-instance committal applications in the High Court (Commercial Court). No appellate history is stated in the judgment.